House bill could allow supermarkets to revive gas discounts

DENVER — Grocery shoppers might get their gas breaks again after the Colorado House moved forward Friday on a bill sponsored by northern Colorado legislators.

Rep. Kevin Lundberg, R-Berthoud, whose district also includes Windsor and parts of Loveland, is sponsoring House Bill 1208, which would change the state’s Unfair Practices Act. Its Senate sponsor is Sen. Steve Johnson, R-Fort Collins.

The 70-year-old law was designed to stop large merchants from putting mom-and-pop stores out of business by underselling them. But last November, the law stopped Colorado consumers from getting discounts on gasoline and generic prescription drugs.

Two gas stations in Montrose sued King Soopers and City Market supermarkets for giving 10-cent-per-gallon fuel discounts in exchange for buying a certain amount of groceries, saying the gas was being sold below cost. A jury said the Unfair Practices Act prohibited doing that and awarded the filling stations $1.4 million.

Lundberg said the law defined “cost” as the wholesale price of the goods plus any overhead costs.

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“But stores sell things below cost all the time,” said state Rep. Jim Riesberg, D-Greeley. “I bought some slacks at (Macy’s) two weeks ago — they were originally $125 but I got them for $25, and that’s below cost.”

Also last fall, Wal-Mart and Target stores began offering discounts for shoppers who filled generic prescriptions at the department stores’ pharmacies. Some co-pays were as low as $4, but the program couldn’t get off the ground in Colorado, Lundberg said.

“In September, a constituent told me that a local pharmacist said that won’t work in Colorado, because Colorado has strict laws with the Unfair Practices Act,” Lundberg told his House colleagues before they moved the bill forward.

He said the bill would allow those discounts, which will help consumers.

“We’re just softening the language (of the law), so that realistically, King Soopers can provide a 10-cent gas discount and Target can provide a $4 prescription,” he said.

Rep. Cheri Jahn, D-Wheat Ridge, is a main cosponsor and several other House members, including Riesberg, signed on as well. A few members objected, however.

Rep. John Soper, D-Thornton, said the gas discounts might sound appealing, but they might be dubious.

“The intent is to get you to go to their store to buy groceries there instead of another store, which may not have a gas discount,” he said.

He said consumers who spend the required amount to get the discount might wind up paying more for their groceries — be it a sack of flour or a more expensive item — to subsidize the gas.

“You might have spent 50 cents more on groceries but saved 25 cents on gas,” he said. “Your overall cost is going to be about the same, because they’ve increased the price on all the other products to do this.”

The bill passed on second reading in the House, and if it passes a final step in the House next week, it will move on to the Senate.

House Bill 1208 faces a final vote before it will go to the Senate and be assigned to a committee in that chamber. The final House vote could come as early as Monday.